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Many Twenty-Somethings Still Uninsured

by Quentin Fottrell

March 23, 2012

Source: Wall Street Journal's Smart Money

President Obama’s health-care reform helped provide coverage to those up to the age of 25 who are living at home, but experts say there’s still a lost generation of uninsured young adults between 26 and 30.

Two years ago this week, President Obama signed his controversial health-care bill into law. It’s designed to bring more people into the net by 2014 — or else pay a fine – but one provision already gives an estimated 2.5 million young adults between ages 19 and 25 years coverage if they are unemployed or still studying. It was one of the first measures of the law to go into effect, and remains among its least bureaucratic and, as a result, cheapest features, reports say.

But there is a growing number of young people in their late 20s who still can’t find work due to the still weak economy and, therefore, remain dependent on their parents for living expenses and medical bills, says Kevin Flynn, president of Healthcare Advocates. “Because of the economy more people aged 50-plus are taking the jobs traditionally filled by 26- to 30-year-old employees,” he says. “They take these jobs for the pay but also for the benefits as their families need the health coverage.”

The latest U.S. Census Bureau suggests that the wealth gap between young and old is indeed growing, compounded by rising levels of college debt and scarce opportunities. The average U.S. household with those aged 65 or older has a net worth nearly 50 times greater than a household headed by someone under 35, according to an analysis of census data by Pew Research Center. The net worth of those under 35 hovers at $3,662 versus $144,700 for all those 45 and older, or $170,500 for households headed by those 65 and over.

Obama had good reason to target the 19-25 age group, experts say. They make up a disproportionately large share of the uninsured, according to the non-profit Kaiser Family Foundation. They have the highest uninsured rate — 30% versus an average of 18.5% for all ages– but over 28% of 26-34 year-olds are also uninsured. But a Gallup poll published late last year indicated that the new law helped lower that the uninsured rate for those aged 18-25 to 28%.

Of course, some twenty-somethings don’t take out insurance because they feel invincible, experts say. Devon Herrick, senior fellow at the Dallas, Tx.-based National Center for Policy Analysis, says, “They may feel almost bullet-proof.” Since health insurance is also commonly regarded as a form of asset protection, it’s less appealing for those with no mortgage or family, he says. “They put their hard-earned money toward other priorities like rent and car payments,” he says.